A controversial Federal Communications Commission proposal to build a smut-free wireless broadband network that would provide no-cost Internet access to nearly all Americans is inching forward. But the auction that would get the process in motion isn't likely to happen until well into next year, according to the FCC.

Under the plan, the winning bidder would be required to provide free broadband service to 50 percent of the country within four years, and 95 percent of the country within 10 years. The license would also require the network provider to install a filter to keep out pornography and other inappropriate content.

Wireless carriers, most vocally T-Mobile, have warned that the plan could result in interference with their existing networks, and have asked the FCC to delay the plan to accommodate further testing.

"We are now in the process of reviewing the records, and considering the test results that were submitted by T-Mobile, to determine whether any adjustments need to be made to the proposal as other commissioners review it," FCC spokesman Robert Kenny told InternetNews.com.

FCC Chairman Kevin Martin circulated the proposal among the commission and called for public comment in late June. The comment period ended Monday, and the commission is now sifting through the dozens of responses it received.

Proponents tout the plan as a way to ensure that all Americans have access to a high-speed Internet connection, envisioning it as a solution to the digital divide, itself a controversial issue.

The spectrum in question is a 25MHz-wide block that resides in the 2.1GHz band, known as Advanced Wireless Services 3 (AWS-3).

In a filing with the FCC, T-Mobile said that its own testing has shown that allocating the AWS-3 spectrum as Martin proposed would interfere with its own licenses in the neighboring AWS-1 band. The carrier recommended that AWS-3 licenses be limited to downlink transmissions, which would create a one-way network where users could download, but not upload, data.

T-Mobile did not respond to request for comment for this story.

As for the timetable, Martin hopes to reach an agreement within the commission on the rules for implementation by the end of the year. That will include determining whether more testing is needed, as T-Mobile suggested.

The next step would be to agree to the rules for the auction, and it would then be another six to nine months before the auction would get underway, Kenny said. So the auction would not likely begin until the second half of 2009.

Meantime, Martin's proposal has drawn attention from lawmakers on both sides of the aisle. Last week, Reps. Ed Markey, D-Mass., and Anna Eshoo, D-Calif., wrote to Martin suggesting that the interference claims were overblown. The lawmakers noted, that the British counterpart to the FCC, Ofcom, had already proved through its own testing that the two bands of spectrum in question were compatible.

"We are concerned that unnecessary interference testing would needlessly delay this auction," they wrote. In April, the representatives, along with Utah Republican Chris Cannon, introduced the Wireless Internet Nationwide for Families Act of 2008, which would require the FCC to auction off spectrum to create a free nationwide network with the pornography filter.

Earlier this month, Oregon Democrat Ron Wyden introduced a similar bill in the Senate.

Congressional support is far from unanimous, however. Martin's proposal has encountered opposition from Republicans Reps. Joe Barton, Texas, and Cliff Stearns, Fla., who argued that the that the conditions would deter some carriers from bidding in the auction, ultimately driving down the price.

[cob:Special_Report]Barton and Stearns cautioned against the FCC dictating the business model for the winning bidder. A free network would most likely be supported by advertising revenue. But the recent congressional scrutiny into a controversial new scheme that some Internet service providers have been experimenting with as a way to serve targeted ads to their subscribers begs the question of whether there would be privacy safeguards built into the rules for the free network.

Kenny acknowledged that those concerns are legitimate, but said that the commissioners would only address that issue once they start drafting implementation rules for the spectrum.

T-Mobile, which has spent $4 billion on its AWS-1 licenses and an additional $2 billion building out its network, warned that interference from the free Internet plan could sabotage its attempts to build out a viable 3G network to compete with the larger carriers "at a time when the commission and Congress have expressed concern about industry consolidation in the wake of the 700MHz auction."

The 700MHz auction, the largest spectrum sell-off in U.S. history, saw incumbent carriers Verizon Wireless and AT&T grab about three-quarters of the airwaves available in the $19.6 billion landgrab. The auction ended in March; the winning bidders will begin incorporating the new spectrum following the digital television transition in February.